The tours and activities industry is among those that have
been hit hardest by the COVID-19 lockdowns.
However, the effects on certain
sub-sectors or individual providers are just as differentiated as the subsequent
development of the entire industry. This is because, unlike other crises caused
by economic factors, demand for tours, activities and attractions did not and
will not decline, and thus is not a general problem for this market.
Lockdowns are an "artificial block of demand," since the demand is still there, but cannot play out. Now that the lockdowns are over, the demand will kick back in. Operators, who are best prepared for that, will benefit the most.
There is a spectrum
If we first take a closer look at which sub sectors of the tours and activites
industry were affected, we find that many outdoor operators had a pretty good
summer, while nearly all indoor operators suffered year-round.
view with the differences surrounding how suppliers adjusted to the lockdown,
how actively they dealt with the outcomes, how creative they were, and how they
were able to develop new revenue streams, then the picture changes again.
The spectrum ranges from creative, active operators with at least some form of
business open during the summer to operators who unfortunately were unable to
build alternative business models and were forced to go out of business.
Much of the difference between staying in business and going out of business
was technical, such as the use of a booking system, timeslot tickets or the
ability to quickly automate and implement less stringent cancellation policies.
Other important factors were flexibility, such as switching to online versions
or operating test centers, and focusing on new target groups, particularly
domestic and specific regions.
Redistribution of market potential
In the macrocosm of the experience industry, the consequences of the lockdown
are now creating a whole range of effects. On the one hand, it has never been
more advantageous to secure market share, exclusive access or simply attractive
inventory through acquisitions of companies in the tours, activities and
Examples include GetYourGuide's purchase of Guidatours or
Hornblower Group's acquisition of Walks and Shoretrips. Here, the market will
continue to consolidate, and we will very likely see more moves of this nature
in the coming months.
At the same time, and a bit counterintuitively, there is a vacuum in the
industry resulting from an economic downsizing or elimination of experience
offers, while demand is higher than it was before the lockdown due to catch-up
effects. In other words, space has opened up for new businesses and granted
more room for existing businesses to expand.
Furthermore, demand has never been so “online.” In the past,
newcomers had to invest a lot of time in building an offline reseller network,
but with the support of digital booking and distribution solutions from
technology providers, the "time-to-market," investment and manpower
requirements for startups are reduced to a new minimum.
This is creating real
momentum at the moment.
Time to find the right experts
In the course of lockdown-related business closures or in the context of market
consolidation, many committed and creative minds have moved to other areas or
are currently about to return to the tours and activities industry - a know-how
potential ready to be called upon.
Those companies that also invest in
recruitment and retention of qualified employees at an early stage will be able
to additionally strengthen their market position. Especially as the situation
continues to ease, the entire tourism sector will normalize and qualified
personnel will become scarce again.
Crisis creates opportunity
Tours, activities and attractions are experiencing a rapid
recovery, but will continue to differ significantly as a sector compared to
what it was in 2019.
Activities take place with smaller groups and increasingly
outdoors when possible, are predominantly oriented towards regional target
groups and often come with a higher price tag due to the higher demand.
in this market environment with an entrepreneurial spirit will find lower
barriers to entry, more untapped potential and a greater thirst for experiences
than ever before.
About the author...
Lukas Hempel is CEO and Matthias Wirz is chief growth officer at BookingKit